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With solar PV as a foundational technology, the Caribbean is poised to transition to a solar-aX economy, leveraging its abundant renewable resources to achieve carbon neutrality. The Caribbean faces significant energy challenges as it relies heavily on fossil fuels and bears high energy costs. These costs have contributed to macroeconomic imbalances, undermining competitiveness and hampering growth due to an over-reliance on expensive imported petroleum products. New research from LUT University outlines a strategic pathway for the Caribbean to achieve carbon neutrality by 2050, emphasizing the need for high electrification and renewable energy sources. The research highlights the role of floating solar PV, e-fuel imports, grid interconnection and early decarbonization of the energy transition. The research offers unique insights into how the region can transition to very high shares of renewable energy and strategically integrate advanced technologies to build a sustainable, low-carbon future. The research is divided into two publications, entitled « A multi-sector, multi-node, and multi-scenario energy system analysis for the Caribbean with focus on the role of offshore floating photovoltaics », published in Renewable and Sustainable Energy Reviews , and « Defossilising Caribbeans energy system: Highlighting on e-fuel imports, grid integration, and accelerated transition », published in IET Renewable Power Generation . The analysis reveals a clear shift towards high electrification, reducing dependence on fossil fuels. Solar PV is projected to dominate, accounting for 67-94% of total electricity generation, while wind will contribute 6-30%. Solar PV generation is comprised of 12-13% prosumer PV, 28-81% onshore-mounted solar, and 1-45% offshore floating solar. This transition is critical to the region’s transformation into a solar-to-X economy , where solar power feeds electricity grids and drives clean fuel production and industrial processes. The solar-to-X economy is a special case of the general solar-to-X economy, which describes energy systems that rely predominantly on electricity for all types of energy demand across all energy sectors. The Solar-aX economy model provides a blueprint for other tropical island nations facing similar challenges and also moving toward very high renewable energy shares. Solar energy is emerging as a dominant force, driven by the Caribbean’s excellent solar resources and improved economic viability, consistent with Puerto Rico’s past energy transition outcomes . In the solar-aX economy, solar PV will generate electricity and contribute to the production of electricity-based e-fuels and e-chemicals, fostering energy security and economic growth. Supported by wind, hydropower, and geothermal sources, this renewable-driven shift will address climate change and create new industries and employment opportunities . Electrification is key to decarbonizing road transport, and the transition from combustion engines to electric vehicles is proving to be a highly efficient solution. However, challenges remain in maritime and air transport, requiring solutions such as e-hydrogen, e-kerosene or biofuels. The Caribbean can achieve sustainable industrialization and a diversified economy by leveraging its low-cost renewable energy resources for full decarbonization through direct and indirect electrification. The Energy-to-X approach enables deep decarbonization of hard-to-abate sectors . These studies highlight the importance of integrating storage technologies to address the variability of renewables and ensure stable and reliable energy supply across all sectors, including those related to the Energy-to-X framework. Similar results have been obtained in the comparable case of storage as a key element in the Energy-to-X economy in Hawaii . Storage technologies such as batteries and hydrogen and methane storage are essential to balance the variability of renewable electricity generation. Batteries offer daily flexibility, hydrogen storage provides reserve capacity for longer-term needs, and methane storage addresses seasonal variations in demand. Vehicle-to-grid technologies help manage variations in demand, improving the overall flexibility and resilience of the Caribbean energy system. These technologies are vital to maintaining the reliability of the solar-to-X economy. E-fuel imports are a critical component of the Caribbean’s energy transition. The limited available land area underscores their importance for developing the infrastructure needed to achieve full decarbonization across all energy sectors, especially in smaller islands. However, e-hydrogen imports are considered unviable due to the technical challenges and high costs associated with shipping liquefied e-hydrogen . E-fuel imports can reduce land use and system costs by 7-16%, while decreasing fuel supply and electricity trade by up to 70% by 2050. E-fuel imports reduce local resource utilization, shifting competitiveness and investment requirements to export hubs. However, the additional flexibility provided by X-conversion energy processes will be lost. Despite this, e-fuel imports offer a strategic opportunity for archipelagos to reduce their dependence on fossil fuels and maintain economic growth. These studies highlight that the Caribbeans transition to carbon neutrality is possible without e-fuel imports, through increased use of indigenous renewable energy resources, strengthening the regions capacity to achieve decarbonization goals, in line with the findings of a previous study on Puerto Rico . The research advances local and international perspectives on early decarbonisation for archipelago countries. By adopting renewable energy technologies, such as solar PV, wind and batteries, early action can significantly reduce emissions and the costs of transitioning to a low-carbon economy. Although accelerated transitions incur costs 3-12% higher than full defossilisation by 2050, the long-term environmental and economic benefits far outweigh these short-term expenses, urging immediate action to avoid higher costs in the future. Grid interconnection plays a crucial role in enabling the Caribbean’s energy transition, offering substantial cost savings. The study shows that interconnected grids can reduce system costs by 11%, lower the levelized cost of electricity by 14%, and reduce CO2 emissions by 4%. Interconnections improve system reliability and flexibility, allowing islands to share energy resources, reduce dependence on fossil fuels, and optimize renewable electricity generation. Grid integration further improves system efficiency, making renewable energy pathways 7-24% cheaper compared to fossil fuel alternatives. With grid interconnections, the Caribbean can maximize the use of its renewable energy resources, ensuring lower costs and greater energy security. The research concludes that the adoption of renewables significantly reduces energy system costs. The hybrid PV-battery solution emerges as the most cost-effective option for the Caribbean, and the potential for this hybrid configuration to dominate the future energy system is also reflected in previous literature . Under optimal policy scenarios, the levelized cost of electricity and the levelized cost of final energy are projected to be 12–37% and 4–30% lower than alternatives by 2050, respectively. This demonstrates that renewable-based pathways are more cost-competitive than traditional fossil fuel options. Integrating solar PV-based solutions into a solar-aX economy provides both environmental benefits and substantial economic opportunities. Looking ahead, the Caribbean’s energy future will feature prominently solar PV, wind, batteries, electrolysers and other power-to-X technologies, driving the defossilisation of the region. This research underscores the critical role of low-cost renewable electricity, energy storage and electrification in establishing a sustainable energy framework, with a clear pathway to carbon neutrality by 2050. E-fuel imports, early defossilisation and grid interconnections are identified as key components of this transition, enabling the Caribbean to develop a more resilient, cost-effective and sustainable energy system. These strategies offer a model for other island nations facing similar energy transition challenges. The evolving power-to-X economy, through direct and indirect electrification approaches, plays a central role in ensuring long-term energy security and fostering economic growth. |
